Digital Customer Experience: The New Face-to-Face

The branch of the future will combine innovative technology with "neighborhood" customer experience.

Face-to-face customer experience has always been the hallmark of retail banking. Going to your neighborhood branch has traditionally felt like going to the Cheers bar in downtown Boston – a place “where everybody knows your name.”

But as the industry’s current focus on cost cutting continues, you may soon have to bid a tearful farewell to your neighborhood bank branch. More banks are closing branches because they are becoming too expensive to operate. In 2012, US banks shut 2,267 branches according to SNL Financial, a Virginia-based research firm. In Wisconsin, Associated Bank estimated that each branch shutdown saves the company $300,000. After closing 21 branches last year, it’s in the process of shutting another dozen.

"The number of transactions in branches is plummeting," says Brett King, author of "Bank 3.0" and "Branch Today, Gone Tomorrow." Customers don't visit branches as often, because, he says, “people do so much more of their day-to-day banking without them."

This presents a new challenge for banks. How can they close branches to reduce costs and still provide an exceptional customer experience with a personal feel?

Maintaining ‘Neighborhood Branch’ Service

In order to maintain the familiarity and quality of “neighborhood branch” service, a number of leading banks, large and small, have introduced video conferencing as the new form of face-to-face customer interaction.

A large U.S. bank, for example, as part of its “branch transformation” initiative, announced in April 2013 the launch of its next generation ATM with video teller assistance. This type of technology enables customers to receive real-time, personal assistance through video conferencing – an experience similar to walking up to a banking center counter.

Additional benefits gained from this initiative include greater flexibility over how, when and where to bank, including access to a range of services during extended hours.

You might be thinking, "Who really needs to speak with a bank teller in the middle of the night?" Apparently, lots of people do. The Financial Brand reports that after one credit union installed a virtual teller system, 60 percent of its transactions took place outside of standard business hours.

Video Conferencing Can Boost Revenue

It is doubtful that bank branches will disappear entirely. However, the types of transactions taking place at the branch will probably change. According to King, branches will most likely become less focused on simple transactions and more focused on sales activities, such as opening new bank accounts and steering customers to more profitable services and products like retirement plans, brokerage accounts and loans.

Video conferencing can also be integrated into these remaining branch locations in order to boost revenue. For example, a large U.S. bank has been trialing a service called Remote Video Wealth Advisers, which allows customers to fill out the necessary paperwork online in advance, and then visit their local branch for a digital face-to-face meeting with the adviser best fit to deliver guidance. With high definition screens in place, this video interaction feels like the adviser is right there in the room.

Banks are not the only organizations using video to cut costs while boosting customer service. Last year Hertz, the largest worldwide airport car rental brand, announced that its home-based agent program would be upgraded to include next generation video-enabled kiosks. In this case, both agents and customers benefit from the more flexible operating hours.

Growth Expected in Video Channel

Richard Snow, vice president and research director for Ventana Research, estimates that less than 10 percent of company contact centers currently have video in place. However, demand for this channel is expected to grow as users become more familiar and fluent with video. In parallel, companies will also have to improve quality and application.

Snow also believes that one of the key challenges involves integrating video technology with other service channels in order to give customers a consistent experience. This will be critical because today’s consumers are known to embrace multiple channels when interacting with their service providers.

Quality Monitoring Begins with Recording

As powerful as the video interface is, organizations wishing to deliver a truly superior customer experience must also invest in video recording technology. This allows them to continuously monitor agent performance, provide additional coaching as needed, and maintain a single standard of performance across the operation. (As an added bonus, it also lowers the organization’s total cost of ownership by simplifying upgrades and training.)

In order to be effective, this recording technology must be capable of capturing audio, video and screen within a single platform. This enables quality monitoring across both audio and visual recordings, enabling the organization to better understand not only what was said during a customer interaction, but also what was implied through the body language of the agent and the customer. These visual cues may help discern the customer’s level of satisfaction with the interaction.

Recording is also a key component of ensuring compliance. Although there is currently no regulation explicitly requiring companies to record video interactions, as banks move towards 100 percent recording, it is a best-practice approach to record any interaction, regardless of the channel.
If video conferencing is the new “Cheers experience” in banking, then video recording is like your DVR, allowing you to replay and gain insights from every scene – or customer interaction.

I absolutely agree, with you Kathy. The banks that are going to succeed will be the banks that are truly multichannel. In PeopleMetrics research (http://info.peoplemetrics.com/..., it has been found that community institutions (community banks and credit unions) are best at engaging customers, which offers valuable insight into what customers want from the banking experience. This study revealed that even among low-touch, younger consumers who are digital natives, community institutions are doing better at creating that emotional connection - and thus fostering loyalty. So if community banks can go digital without losing their emotional aspect, they'd rock at customer engagement.

This generation is the first to truly live and work online. They communicate on social media faithfully and round the clock. Constant online interactions also make this generation feel integrated into their community, whether thatGÇÖs a group of friends, followers or co-workers. Accustomed to transparency, they both express their individuality and gauge othersGÇÖ reactions online GÇö holding both themselves and others accountable for progress. So looking at this small business owners and big scale business owners are also using Video conferencing and other technologies to improve digital customer experience.

This was in the news yesterday: GÇ£Bank of America and SunTrust Banks lead all banks in branch closings over the past 12 months, according to SNL Financial. The bank research service says BofA since last October has closed a net 183 banking centers. SunTrust in the same time frame has shuttered a net 127 branches. PNC Financial Services Group ranks No. 3 in net closings at 105.GÇ¥ The end of the article mentions that despite the closings, BofA still has more than 5,300 banking centers in operation across the U.S. and will soon introduce new "express" banking offices which will feature new machines with the ability to videoconference with a teller.

Video at the branch or online certainly has a place, particularly for specialty products such as wealth management and mortgage. However, video at the ATM seems to be a solution in search of a problem. How many transactions by ATM users are sufficiently complicated to require assistance? How many of these transactions are needed to justify the initial and ongoing expense of the video component? ATMs are now deployed and positioned for transaction speed, often in a very public place. It is ironic that as financial institutions introduce pre-staged transactions via QR codes, we are talking about concepts which would undoubtedly make the line move more slowly. Perhaps there is justification for video assist at a lobby self-service device such as those deployed at University FCU but the CFO's office is still going to question why onsite branch personnel can't address the limited number of transactions which would require video assist.

Yes, as much as people love self service, and completing things online and on a mobile device, I believe when it comes to making a decision on a significant financial product they prefer to talk to a real person.

ItGÇÖs interesting to see how Amazon is now using video to transform their approach to customer service. Before you couldn't even find a 1800 number on their website. Now from their new Kindle FireGÇÖs (tablet) GÇ£MAYDAYGÇ¥ feature you can connect with a live Amazon customer service expert via video chat within 15 seconds, 24/7. Just think of how much that's going to cost them. With millions of tablets on the market Amazon will have to hire a significant amount of people to support this new feature. Yahoo Finance tech reporter Aaron Pressman thinks this feature is GÇ£a Trojan horse for Amazon to get one foot into direct customer service. It becomes more than just GÇÿHow does my brightness feature work?GÇÖ but GÇÿWhat book should I buy?GÇÖ GÇÿWhat movie should I watch?GÇÖGÇ¥

I wonder how long it will be until we see a "MAYDAY" video chat feature on our bank's mobile app?

I don't dispute the retrenchment on branches, nor the emergence of video/videoconference as an emerging channel, but I think it's important also to remember that as banking has become multi/omnichannel (insurance also) no one channel has been completed replaced. It's "all of the above" more than "either/or" -- as banks discovered years ago when they thought ATMs would replace branches. The challenge isn't just investing in new channels, it's investing in an architecture and data capabilities that effective supports and integrates all channels -- enabling not just "anywhere, any time, any channel" interactions, but also a consistent experience across all channels, and also the FI recognizes and engages appropriately with the cusotomer regardless of the channel.

Nathan, we are seeing the same thing. Our research showsthat 93% of customers in the Insurance industry use live reps viaphone, making it the most commonly used channel for interacting withtheir service provider.

There seems to be a pendulum swinging in terms of consumers' desire to speak to people about their financial transaction. In insurance recent research indicates that while customers want to do a whole lot online, the ability to talk to a live agent at some point in the application process or know that there's one around in the event of a claim is huge. I wonder how this might affect banks. More virtual tellers, but more staff that can handle account opening, loans, etc., even if much of the initial legwork is done online? I know I hate going to the bank and waiting forever to see a banker when there's a couple tellers facing an empty line because everyone's just at the ATM anyway.